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SAP acquires Gigya - A Snap Analysis from Down Under

The News

Well, it is already more
than two weeks ago that this news hit the wires, but SAP announced the acquisition
of Gigya, a leading Customer Identity and Access Management (CIAM) platform
vendor. Gigya got placed in the top position of Forrester’s Wave for Customer
Identity and Access Management Platforms Q2 2017, a position that is owned by
SAP, if the company manages to address customer (and hence analyst) concerns
that arise from the merger.

SAP, in turn, with its
SAP Hybris branded software, provides a suite of commerce and engagement solutions
that allow organizations to build and leverage in real time a 360 degree view
on the customer, across channels and devices.

Gigya is an SAP
(Hybris) partner since 2013 or so, and has integrations with SAP Hybris Ecommerce,
SAP Hybris Marketing and SAP CRM.

SAP intends to make
the Gigya platform part of its Hybris portfolio.

The transaction is
expected to be closed by end of 2017.

The Bigger Picture

The CIAM market is evolving
fast, coming out of the area of providing social logins with the purpose of
simplifying web site logins only a decade ago. This purpose remains but along
with solving registration problems there are now a lot regulation challenges
that are to be addressed. Just think, management of consent and preferences
across sites, or GDPR, which imposes data residence requirements on top.

With the additional data
collection capabilities of CIAM solutions there is quite an upside for CRM
vendors – especially for ones with strong marketing automation and profiling
capabilities, like SAP. There is an increased ability to accurately address
individual customers based upon their behaviour and across devices, therefore
improving engagement capabilities, which in turn serve the goal of better
experiences.

This will become more
and more important in an emerging IoT world, where a user will have many
devices. The combination of managing logins with profiling enables moving IoT
scenarios away from being device centric to becoming customer centric. This is
more of a revolution than of an evolution.

My PoV and Analysis

This acquisition is a
great move by SAP because it improves SAP’s solution portfolio on at least two
dimenstions:

·SAP now is a considerable CIAM player

·CiAM adds important glue to the current
offerings

SAP itself so far is
not known for its abilities in the area of Identity Management – especially outside
of SAP applications. With acquiring Gigya this changed. After completing the
transaction SAP boosted itself from a nobody into the CIAM pole position.

The acquisition nicely
rounds off the Hybris suite of products and adds something that Microsoft
acquired with LinkedIn, or Google and Facebook have natively: Data about
preference and behaviour of customers, across many sites. This data does not
only allow for increased profiling capabilities that enable a more accurate and
relevant customer engagement; it also forms an invaluable source for
additional, data based offerings, from Data as a Service to the delivery of AI
as a service. This, in turn fits into the Leonardo concept.

Thinking further than ‘just’
Hybris, SAP now has a software that can help modernizing its own (internal) identity
and access management and something that can be used as an improved SSO.

There may be some
benefit for the GDPR offerings of SAP, but then especially requests to delete
personal data regularly need to be fulfilled in several business systems, so I
wouldn’t put too much emphasis on this topic. SAP already had the technological
foundations for this before the acquisition.

On the concern side we
will see how Gigya moves on from a (trusted) independent vendor to become part
of a larger entity. This certainly has the potential of introducing some bias
and raises questions like: How will other vendors’ software still be supported?
Think of marketo, to name but one. SAP needs to provide reliable guidance to
Gigya prospects and customers – as well as partners – fast. I can already see a
tsunami of FUD being created.

Where I do perceive a
real issue is the direction the CIAM market itself seems to take. It looks like
being built upon an inside-out thought that targets at delivering benefits to
the businesses and seems to address customer/consumer interests only as an
afterthought. A solution that focuses on adding value to companies by being
valuable to their customers’ needs to be built around the outside-in notion
that all collected data first and foremost belongs to the customers/consumers
instead of selling more accurate targeting of ads as a value to them.

The inside-out notion
can be read in the Forrester report and becomes abundantly clear in Gigya CEO Patrick
Salyer’s statement that got quoted in the SAP announcement:

“Combining the data
matching and enrichment capabilities of Sap Hybris Profile with Gigya’s
consent-based identity data and access management platform will allow us to
identify consumers across channels and offer a robust single consumer profile.
This is a vital step for digitalizing businesses because companies need to be
able to draw accurate conclusions seamlessly across all channels, including
web, mobile, in-store or connected devices, and the Internet of Things, as well
as collect data about consumer preferences. Together we are well positioned to
drive more effective marketing, sales and service through data, while the
customer stays in control of how much data is shared.”

The consumer as an
afterthought – and we all know what choices usually are offered to consumers:
Accept our terms or go away.

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